Q1 2024 Cytosorbents Corp Earnings Call
Operator: Good afternoon and welcome to Cytosorbents' first quarter 2024 financial and operating results conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the company's rec... At this time, I'd like to turn the call over to our moderator, Eric Grimner. Please go ahead, Mr. Grimner. Thank you, and good afternoon.
Good afternoon, and welcome to Cytosorb and first quarter. So have you done before financial and operating results conference call.
Eric Grimner: This time all participants are in listen only mode. Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the company's request.
Jim There: At this time I'd like to turn the call over to our moderator and Jim There. Please go ahead Mr. <unk>.
Eric Grimner: Thank you, and good afternoon. Welcome to Cytosorbents' first quarter 2024 Financial and Operating Results conference call. Joining me from the company are Dr. Phil Chan, Chief Executive Officer, Vincent Capponi, President and Chief Operating Officer, Kathleen Bloch, Chief Financial Officer, Dr. Micah Deliargyris, Chief Medical Officer, Dr. Christian Steiner, Executive Vice President of Sales and Marketing, and Christopher Cramer, Senior Vice President of Business Development. Before I turn the call over to Dr. Chen, I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking statements that are subject to risk and uncertainty.
Eric Grimner: Thank you and good afternoon, welcome to satisfy Orben foods first quarter 2024 financial and operating results conference call.
Eric Grimner: Joining me from the company are Dr. Phil Chan Chief Executive Officer, Vincent Compony, President and Chief Operating Officer, Kathleen Bloch, Chief Financial Officer, Dr. Michael <unk>, <unk>, Chief Medical Officer, Dr. Christian Steiner Executive Vice President of sales and marketing Christopher Cramer.
Eric Grimner: Senior Vice President of business development.
Eric Grimner: Management may make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from the results discussed today, and therefore, we refer you to more detailed discussion of these risks and uncertainties in the company's filings with the SEC. Any projections as to the company's future performance represented by management include estimates today as of May 9th, 2024, and we assume no obligation to update these projections in the future as market conditions change.
Eric Grimner: Before I turn the call over to Dr. Chan I'd like to remind listeners that during the call management's prepared remarks may contain forward looking statements, which are subject to risks and uncertainties management may make additional forward looking statements in response to your questions. Today. Therefore, the company claims protection under Safe Harbor.
Eric Grimner: For forward looking statements contained in the private Securities Litigation Reform Act of 1995.
Eric Grimner: Actual results may differ from the results discussed today and therefore, we refer you to more detailed discussion of these risks and uncertainties in the company's filings with the SEC.
Eric Grimner: Any projections as the Companys future performance represented by management include estimates today as of May nine 2024, and we assume no obligation to update these projections in the future as market conditions change.
Eric Grimner: During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter of 2024 by Dr. Chan and Ms. Bloch. Following that presentation, we will open the line to your questions during the live Q&A session with the rest of the management team. Now, it is my pleasure to turn the call over to Dr. Phillip Chan.
Eric Grimner: During today's call, we will have an overview presentation covering the operating and financial highlights for the first quarter of 2024 by Dr. Chan and MS. Bloch following that presentation. We will open the line to your questions. During the live Q&A session with the rest of the management team and.
Speaker Change: Now it is my pleasure to turn the call over to Dr. Phillip Chan.
Speaker Change: Thank you very much Eric.
Phillip P. Chan: And good afternoon, everyone. We are pleased to announce the achievement of $9 million in product sales in the first quarter of 2024, which is a 14% increase from $7.9 million a year ago and a 22% increase sequentially from $7.3 million in the fourth quarter of 2023. Another major accomplishment for the quarter was the expansion of our product gross margins to 76%, up 800 basis points from 68% in Q1 of 2023, excluding a one-time non-recurring inventory adjustment recorded in the first quarter of this year. This was squarely within our previous guidance of achieving 75 to 80% product gross margins during this year and highlights the scalability and efficiency of our state-of-the-art manufacturing facility and process.
Speaker Change: And good afternoon, everyone. We're pleased to announce the achievement of $9 million in product sales in the first quarter of 2024.
Phillip P. Chan: A 14% increase from $7 9 million, a year ago, and a 22% increase sequentially from $7 3 million in the fourth quarter of 2023.
Phillip P. Chan: Another major accomplishment for the quarter was the expansion of our product gross margins to 76% up 800 basis points from 68% in Q1 of 2023, excluding a onetime nonrecurring inventory adjustment recorded in the first quarter of this year.
Phillip P. Chan: Squarely within our previous guidance of achieving 75% to 80% product gross margins during this year and highlights the scalability and efficiency of our state of the art manufacturing facility and processes.
Efthymios N. Deliargyris: As you will hear from Micah Slater, our STAR-T data was presented for the first time by Principal Investigator Dr. Michael Mack at the 104th Annual Meeting of the American Association for Thoracic Surgery, or AATS, in Toronto, Canada, one of the most prestigious cardiothoracic surgery conferences in the world. We also hosted a virtual KOL and Analyst Investor Day earlier this week featuring a review of the STAR-T pivotal trial results and real-world experience with blood thinner removal in Europe, with a replay available by clicking this link here.
Phillip P. Chan: As you will hear from Mike. Its later our Star T data was presented for the first time by principal investigator Dr. Michael Max at the 104th annual meeting of the American Association for thoracic surgery or.
Efthymios N. Deliargyris: Yes in Toronto, Canada, one of the most prestigious cardio thoracic surgery conferences in the world.
Efthymios N. Deliargyris: We also hosted a virtual kols and analyst Investor Day earlier. This week featuring a review of the Star T pivotal trial results and real world experience with blunted, a removal in Europe with a replay available by clicking the link here.
Efthymios N. Deliargyris: Based on our current status, we believe we are on track to submit marketing applications in parallel for the Investigational Drug Zerb ATR system to FDA as a de novo application and Health Canada in the third quarter of this year. We have now cumulatively delivered more than 237,000 devices and expect to reach a quarter million devices this year.
Efthymios N. Deliargyris: Based on our current status. We believe we are on track to submit marketing applications in parallel for the investigational drug Czar of ATR system to FDA as it de Novo application and health Canada.
Efthymios N. Deliargyris: In the third quarter of this year.
Efthymios N. Deliargyris: We have now cumulatively.
Efthymios N. Deliargyris: Yes.
Efthymios N. Deliargyris: We have now cumulatively delivered.
Efthymios N. Deliargyris: Or the 237000 devices and expect to reach a quarter million devices. This year.
Phillip P. Chan: Later this quarter, we also expect to take delivery of and launch our purified hemo perfusion pump in select international countries. We already have strong interest from customers in many countries where dialysis is not well established and where an easy-to-use machine like Purify enables the treatment of patients with cytosorbs. In more established countries like Germany, the availability and simplicity of Purify is expected to spur early usage of Cytosorb in disease processes and may enable more types of treatment, such as the treatment of chronic liver disease.
Efthymios N. Deliargyris: Later this quarter, we also expect to take delivery of and launch our purified hemo perfusion pump inflict international countries.
Phillip P. Chan: He already has strong interest from customers in many countries, where dialysis is not well established.
Phillip P. Chan: And we're an easy to use machine like purify enables the treatment of patients with Cytosorb.
Phillip P. Chan: More established countries.
Phillip P. Chan: Like Germany, the availability and simplicity of purified is expected to spur early usage of cytosorb in the disease processes and may enable more types of treatment such as the treatment of chronic liver disease.
Phillip P. Chan: We are seeing strong customer responses to the new positive data being published on Cytosorb in a wealth of applications such as acute liver disease, the first proof of concept randomized trial, and heart transplant. The First Use Cases in Hemorrhagic Shock, Septic shock, and fluid balance. Improved survival in burn patients with sepsis and kidney injury, and a review article summarizing the benefit of Cytosorb in the treatment of acute respiratory distress syndrome, just to highlight a few.
Phillip P. Chan: We're seeing strong customer responses to the new positive data being published on Cytosorb and a wealth of applications such as acute liver disease.
Phillip P. Chan: The first proof of concept randomized trial in heart transplant.
Phillip P. Chan: First use cases in hemorrhagic shock.
Phillip P. Chan: Septic shock and fluid balance.
Phillip P. Chan: Improved survival in burn patients with sepsis and kidney injury.
Phillip P. Chan: And a review article summarizing the benefit of Cytosorb in the treatment of acute respiratory distress syndrome, just to highlight a few.
Phillip P. Chan: One of the reasons we believe there's so much more room to grow is because Cytosorb addresses the core problem of severe uncontrolled inflammation in these life-threatening conditions that can otherwise lead to organ failure and death. At this time, I'd like to turn the call over to Kathy to cover financial highlights.
Phillip P. Chan: One of the reasons. We believe there is so much more room to grow is because cytosorb addresses the core problem of severe uncontrolled inflammation in these life threatening conditions that can otherwise lead to organ failure and death.
Phillip P. Chan: At this time I'd like to turn the call over to Kathy to cover financial highlights Kathy.
Kathleen P. Bloch: Thank you, Phil. And hello to everyone on the call today.
Kathy: Thank you, Phil and Hello to everyone on the call today I will be discussing our first.
Kathy: Our financial results, including revenue and gross margin and it will also be providing an update on our working capital and cash runway next slide please.
Kathleen P. Bloch: I will be discussing our first [inaudible] Cytosorb product sales were approximately $9 million in the first quarter of 2024, compared to $7.9 million in the first quarter of 2023, an increase of approximately $1.1 million or 14%. Our first quarter 2024 grant revenue was approximately $797,000, as compared to $1.5 million in the first quarter of 2023. This decrease was due to the conclusion of several grants, which we completed in 2023. Our total first quarter 2024 revenue, which includes both product sales and grant revenue, was approximately $9.8 million, as compared to $9.4 million in 2023, and product gross margin was 76% in 2024, an 800 basis point increase compared to product gross margin of 68% in 2023. We do note that the first quarter 2024 product gross margin calculations exclude the impact of a one-time inventory adjustment recorded during the quarter.
Kathy: Cytosorb product sales were approximately $9 million in the first quarter of 2024 compared to $7 $9 million in the first quarter of 2023, an increase of approximately $1 1 million or <unk>.
Kathleen P. Bloch: 14%.
Kathleen P. Bloch: Our first quarter 2024 grant revenue was approximately $797000 as compared to one $5 million in the first quarter of 2023 and this decrease was due to the conclusion of several grants, which we completed in 2023.
Kathleen P. Bloch: Our total first quarter 2020 for revenue, which includes both product sales and grant revenue was approximately $9 8 million.
Kathleen P. Bloch: As compared to $9 4 million in.
Kathleen P. Bloch: In 2023.
Kathleen P. Bloch: And product gross margin was 76% in 2024, and 800 basis point increase compared to product gross margin of 68% in 2020, we do note that first quarter 2020 for product gross margin calculation excludes the impact of a onetime inventory adjust.
Kathleen P. Bloch: <unk> recorded during the quarter next slide please.
Kathleen P. Bloch: The blue bars of this chart represent our annual product sales for the trailing 12-month period ended March 31st for each year, 2018 to 2024. We know that 2021 and 2022 product sales were favorably impacted because Cytosorb was used extensively to treat COVID-19 patients. And, of course, this usage ceased following the containment of the pandemic in the years ending March 31st, 2023 and 2024.
Kathleen P. Bloch: The blue bars of this chart represent our annual product sales for the trailing 12 month periods ended March 31st for each year 2018 to 2024, we know that 2021 and 2022 product sales were favorably impacted because cytosorb was used extensively.
Kathleen P. Bloch: To treat COVID-19 patients and of course this Houston usage east following the containment of the pandemic and the year's ending March 31, 2023, and 2024, if we take a look at the Orange trends Arrow, which tracks along core non COVID-19 revenue.
Kathleen P. Bloch: If we take a look at the orange trend arrow, which tracks along core non-COVID-19 revenue, we can see that post-COVID-19 12-month periods ending March 31st, 2023, and 2024 continue to show positive growth in our core non-COVID-19 business. The post-COVID market has been challenging, for reasons we have already articulated, but we are seeing improvements in the marketplace. Our year-over-year growth for the trailing 12 months ended March 31, 2024, increased by 10% compared to the previous 12 months.
Kathleen P. Bloch: Let's say that post Covid 1912 month periods, ending March 31, 2023, and 2024 continue to show positive growth in our core non COVID-19.
Kathleen P. Bloch: COVID-19 product sales the post COVID-19 market has been challenging for reasons. We've already articulated. However, we are seeing improvements in the marketplace our year over year growth for the trailing 12 months ended March 31, 2024 increased by 10% compared to the previous 12 months.
Kathleen P. Bloch: Additionally, exclusive of the impact of the COVID-19 sales in 2021 and 22, our overall CAGR for the six years ended March 31, 2024 is a respectable 13, 3%.
Kathleen P. Bloch: Additionally, exclusive of the impact of the COVID-19 sales in 2021 and 2022, our overall CAGR for the six years ended March 31st, 2024 is a respectable 13.3%. Next slide. So go back to that slide. I apologize.
Kathleen P. Bloch: I also wanted to point out the green line, which tracks our year over year gross margin. This indicates a decline in 2023, and this was, of course, due to the transitioning of full manufacturing operations from our old facility over to our new facility. In the first quarter of 2024, gross margins were 76%. (inaudible) Next slide, please.
Kathleen P. Bloch: Next slide please.
Kathleen P. Bloch: So go back to that slide I apologize I also wanted to point out the Green line, which tracks our year over year gross margins.
Kathleen P. Bloch: This indicate.
Kathleen P. Bloch: <unk> in 2023, and this was of course due to transitioning our full manufacturing operations from our old facility over to our new facility.
Kathleen P. Bloch: In the first quarter of 2024 gross margins were 76%.
Kathleen P. Bloch: Excluding the impact of the onetime inventory adjustment and they are on par with our margins and levels prior to the move to our new facility and we believe that we will be able to show further improvement in the 2020 for gross margins as we continue to scale up production and realized additional manufacturing efficiencies.
Kathleen P. Bloch: Next slide please.
Kathleen P. Bloch: This next slide shows our quarterly-over-quarter product sales results. We already noted that first quarter 2024 product sales increased approximately 14% over first quarter 2023 product sales. We also want to point out here that first quarter 2024 product sales rose $1.6 million or 22% over the immediately prior quarter. Our first quarter 2024 product sales of $9 million represents the highest post-COVID-19 core product sales quarter in our history. Next slide, please.
Kathleen P. Bloch: This next slide shows our quarter over quarter product sales results, we already noticed the first quarter 2020 for product sales increased approximately 14% over first quarter 2023 products. We also want to point out here is first quarter product sales growth.
Kathleen P. Bloch: One $6 million or 22% over the immediately prior quarter.
Kathleen P. Bloch: Our first quarter 2024 products sales of $9 million represents the highest.
Kathleen P. Bloch: COVID-19 core product sales quarter in our history.
Kathleen P. Bloch: Next slide please.
Kathleen P. Bloch: As of March 31st, 2024, we have $10.1 million in cash, which includes $1.5 million of restricted cash. We believe that cash on hand is sufficient to fund the company's operations into the fourth quarter of 2024. We continue to work to strengthen our balance sheet and reduce operating expenses through tight control over working capital, in particular management of accounts receivable and inventory levels. Conservation of cash is a top corporate priority. We have reduced our head count, adjusted our budgeted spending, and taken other measures to reduce our quarterly cash burn in 2024.
Kathleen P. Bloch: As of March 31, 2024, we have $10 1 million in cash which includes $1 5 million of restricted cash we believe that cash on hand is sufficient to fund the companys operations into the fourth quarter of 2024, we continue to work to strengthen our balance sheet and rigs.
Kathleen P. Bloch: Lease operating expenses pretty tight control over working capital in particular management of accounts receivable and inventory levels.
Kathleen P. Bloch: Provision of cash is a top corporate priority, we have reduced our head count adjusted our budgeted spending and taking other measures to reduce our quarterly cash burn in 2024.
Kathleen P. Bloch: We have also instituted and continue to maintain tight controls over spending, and these actions are all expected to help preserve our cash runway. In addition, the company is actively pursuing alternative sources of capital. Our immediate focus is on non-dilutive debt financing, and we are currently in active discussions with multiple debt lenders on this front. So that will conclude my remarks for today. And at this time, I'm pleased to be able to turn the call over to my esteemed colleague, our Chief Medical Officer, Dr. Micah Deliargyris. Dr. Micah.
Speaker Change: We have also instituted and continue to maintain tight control over spending and these actions are all expected to help preserve our cash runway.
Speaker Change: In addition, the company is actively pursuing alternative sources of capital our immediate focus is on non dilutive debt financing and we are currently in active discussions with multiple debt lenders on this front.
Efthymios N. Deliargyris: So that will conclude my remarks for today and at this time I am pleased to be able to turn the call over to my esteemed colleague, our Chief Medical Officer, Dr. Mike <unk> Mike.
Efthymios N. Deliargyris: Thank you Kathy.
Efthymios N. Deliargyris: Good afternoon to everyone on the call today. In the next few minutes, I will review the current state of our clinical and regulatory activities for the upcoming submissions to regulators in the US and Canada, which will hopefully provide you with the necessary visibility into our efforts to make DrugZorb ATR available to North American healthcare providers. First, I would like to remind everyone that DrugSorb ATR is a breakthrough device. In fact, the FDA has granted two separate breakthrough designations for drug-drug ATR. First, for the removal of ticagrelor in patients undergoing urgent or emergent surgery, and a second one for the removal of the two market-leading anticoagulants, apixaban or Eloquus and rivaroxaban or Xarelto, for the same intended application.
Speaker Change: Next slide please and good afternoon to everyone on the call today.
Efthymios N. Deliargyris: And the next few minutes I will review the current state of our clinical and regulatory activities for the upcoming submissions to regulators in U S and Canada that will hopefully provide you the necessary visibility into our efforts to make drugs of ATR available to North American health care providers.
Efthymios N. Deliargyris: First I would like to remind everyone that drugs of ATI is a breakthrough device.
Efthymios N. Deliargyris: In fact, the FDA has granted two separate breakthrough designation for drug drove ATR.
Efthymios N. Deliargyris: First for the removal of <unk> in patients undergoing urgent or emergent surgery.
Efthymios N. Deliargyris: And the second one for the removal of the two market leading anticoagulants.
Efthymios N. Deliargyris: Sedan or earlier question on Rivaroxaban or was there also for the same intended applications.
Efthymios N. Deliargyris: We believe that having breakthrough status is an important component of the DrugServe ATR regulatory strategy, and let me explain why. The Breakthrough Program is specifically designed to provide timely access to novel devices addressing large unmet medical needs by speeding up both the development and the review phases of the process. The required criteria for a Break-the-Device designation are listed on this slide.
Efthymios N. Deliargyris: We believe that having breakthrough status is an important component of the drugstore of Hei regulatory strategy and let me explain why.
Efthymios N. Deliargyris: First.
Efthymios N. Deliargyris: The breakthrough program is specifically designed to provide timely access for mobile devices addressing a large unmet medical needs by speeding up both the development and the review phases of the process.
Efthymios N. Deliargyris: They required criteria for breakthrough device designation are listed on this slide.
Efthymios N. Deliargyris: The first criterion is that a device provides for more effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition. For the second criterion, the device must meet at least one of the following considerations, that it represents breakthrough technology, that there are no approved or cleared alternatives, that it offers significant advantages over existing approved or cleared alternatives, and other device availabilities in the best interest of patients. Since 2015, the FDA has granted breakthrough device designation status to 192 cardiovascular and 83 GI and urology devices that are diagnosed
Efthymios N. Deliargyris: The first got here was that the device provides for more effective treatment or diagnosis of life, threatening or irreversibly debilitating human diseases or conditions.
Efthymios N. Deliargyris: For the second criterion the device must meet at least one of the following considerations that it represents a breakthrough technology that there are no approved or cleared alternatives.
Efthymios N. Deliargyris: But it offers significant advantages over existing approved or cleared alternative.
Efthymios N. Deliargyris: And then the device availability is in the best interest of patients.
Efthymios N. Deliargyris: Since 2015, the FDA has granted breakthrough device designation.
Efthymios N. Deliargyris: It is 217 hundred 92, cardiovascular and 83, Gi urology devices or diagnostics.
Efthymios N. Deliargyris: This is relevant because the intended target population for drugs or ADRs are cardiovascular patients, and G.I. Urology will be the FDA review branch for our submission. Finally, breakthrough designation submissions undergo priority review and need to meet the FDA rigorous standards for safety and effectiveness. Next slide.
Efthymios N. Deliargyris: This is relevant because they can get target population for drugs or bto cardiovascular patients and Gi urology will be the FDA review branch for a submission.
Efthymios N. Deliargyris: Yeah.
Speaker Change: Finally, Ed.
Efthymios N. Deliargyris: Breakthrough designation submissions undergo priority review and we.
Efthymios N. Deliargyris: To meet the FDA standards for safety and effectiveness.
Efthymios N. Deliargyris: Next slide please.
Efthymios N. Deliargyris: As we have stated in our press release, and you just heard from our CEO, Dr. Phil Chan, the STAR-T results were recently presented at AATS and were also reviewed during our recent webinar, Key Opinion Leader and Analyst Investor Day, by Study Principal Investigator Dr. Michael Mack. I urge you to listen to the webinar replay that you can find on the link provided to you, which includes presentations by all three STAR-T Principal Investigators and also an overview of the increasing adoption of anti-thrombotic removal in European cardiac surgical practice by the STAR Registry Principal Investigator, Dr. Michael Smoker. Let's now review the highlights of the STAR-T results.
Efthymios N. Deliargyris: As we have stated in our press release.
Efthymios N. Deliargyris: You just heard from our CEO Dr. <unk> Chan the start peer results were recently presented a double Ats and were also reviewed during our recent webinar key opinion leader an analyst Investor day.
Efthymios N. Deliargyris: The study's principal investigator Dr. Michael Max.
Efthymios N. Deliargyris: I urge you to listen to the web and a replay you can find the link provided to you.
Efthymios N. Deliargyris: As presentations by all three star principal investigators and also an overview of the increasing adoption of anti thrombotic removal European cardiac surgical practice by the Star registry postpone investigator Dr. Michael <unk>.
Efthymios N. Deliargyris: Let's now review the highlights of the stock <unk> results.
Efthymios N. Deliargyris: First of all, the study makes the following points: There were 140 subjects randomized in the study, however 8 of those subjects did not receive a study device, and therefore the overall population consisted of 132 subjects. Among them, 92% underwent isolated coronary artery bypass grafting, or CABG, surgery, while 8% underwent other types of cardiac operations. The enrollment was split approximately two-thirds of the subjects came from United States investigative sites and approximately one-third from Canadian investigative sites.
Efthymios N. Deliargyris: First of all the study matrix.
Efthymios N. Deliargyris: There were 140 subjects randomized study however, eight of those subjects did not receive the study device and therefore, the overall population comprises of 132 subjects.
Efthymios N. Deliargyris: Our more than 92% underwent isolated coronary artery bypass grafting or cabbage surgery, while 8% other what other types of cardiac operations.
Efthymios N. Deliargyris: The enrollment was split approximately two thirds of the subjects came from the United States investigative sites.
Efthymios N. Deliargyris: One third from Canadian investigator sites.
Efthymios N. Deliargyris: The study protocol was well-executed, with less than 10% of study subjects experiencing a major protocol change. Finally, study follow-up was 100% complete, with zero patients lost to follow-up. Reviewing the safety in the overall population. The primary end point, the primary safety end point of the study, was met, as evidenced by three separate independent data safety monitoring board reviews that occurred after 40, 80, and 140 patients went through the trial. In each of those reviews, the DSMB recommended continuation of the study and voiced no concerns around safety. Overall, adverse events were balanced between the device and the control arms in the trial. There were zero serious adverse events reported.
Efthymios N. Deliargyris: The study protocol was well executed with less than 10% of study subjects experiencing a major political deviation.
Efthymios N. Deliargyris: Finally studied total <unk> was 100% complete with zero patients lost to follow up.
Efthymios N. Deliargyris: Reviewing the safety in the overall population.
Efthymios N. Deliargyris: The primary endpoint of the primary safety endpoint of the study was met.
Efthymios N. Deliargyris: As evidenced by three separate independent data safety monitoring board reviews that are tiered up to 48 million and 140 patients welcome good trial.
Efthymios N. Deliargyris: Each one of those reviews, the DSM be recommended continuation of the study and Invoiced local sense around safety.
Efthymios N. Deliargyris: Overall adverse events were balanced between the device and the control arms in the trial.
Efthymios N. Deliargyris: There was zero device related serious adverse events reported.
Efthymios N. Deliargyris: There were zero unanticipated device adverse events reported, and there were zero device-related adverse events that led to discontinuation of the study. Turning now to efficacy, we assess efficacy in the trial by looking at post-operative bleeding. That was done via two composite endpoints that comprised the universal definition of peripheral bleeding events and also by chest tube drainage collected from each of the patients in the study. In addition, we performed an exploratory assessment of major bleeding. As we have reported previously, the primary composite endpoint in the overall population was not. However, in the isolated cabbage population...
Efthymios N. Deliargyris: There were zero unanticipated device adverse events reported.
Efthymios N. Deliargyris: And there were zero with device related adverse event was led to discontinuation of the study.
Efthymios N. Deliargyris: Okay.
Efthymios N. Deliargyris: Turning now to the efficacy.
Efthymios N. Deliargyris: We assess efficacy in the trial, but looking at postoperative bleeding.
Efthymios N. Deliargyris: That was done at two composite endpoints that comprise of the universal definition of carrier pretty bleeding events and also by the chest drainage collected from each of the patient in the study.
Efthymios N. Deliargyris: In addition, we executed an exploratory assessment of major bleeding.
Efthymios N. Deliargyris: As we have reported previously the primary composite endpoint in the overall population was not met.
Efthymios N. Deliargyris: However, in the isolated cabbage population.
Efthymios N. Deliargyris: Among patients who did not have any protocol, or major protocol deviations, the so-called isolated capacity per protocol population, we observed the following findings. The pre-specified composite end point that included both moderate and severe bleeding events demonstrated a win ratio of 1.33. And for the audience, let me remind you that any win ratio above 1 suggests a treatment effect for the investigation you will be writing. However, that win ratio was not significant with a p-value of 0.202.
Efthymios N. Deliargyris: Among patients who did not have any protocol major protocol deviations the so-called isolated cabbage.
Efthymios N. Deliargyris: Political population we observed the following findings.
Efthymios N. Deliargyris: The Prespecified composite endpoint that included both moderate and severe bleeding events, demonstrating a win ratio of one <unk>.
Efthymios N. Deliargyris: And for the audience, let me remind you that any win ratio above one suggest a treatment effect for the investigation device. However that win ratio was not significant with a P value of <unk> two zero to.
Efthymios N. Deliargyris: The pre-specified composite endpoint that only included severe bleeding events demonstrated a win ratio of 1.59, which was significant with a p-value of 0.041. Since the UTBB definition allows for events to be declared simply by transfusions, the principal investigators of the study wanted to ensure that only clinical bleeding events were included in the analysis and therefore performed a sensitivity-blinded review of the events, where they identified a number of cases that were included in the original analysis simply on the basis of transfusions but without any evidence of clinical bleeding.
Efthymios N. Deliargyris: The prespecified composite endpoint that only included severe bleeding events demonstrated win ratio one five.
Efthymios N. Deliargyris: Which was significant with a P value of zero point of view forward.
Efthymios N. Deliargyris: Since the <unk> definition.
Efthymios N. Deliargyris: Those four events to be declared simply by transfusions.
Efthymios N. Deliargyris: Principal investigators of the study wanted to ensure that only clinical bleeding events were included in the analysis and therefore performance sensitivity blinded review of the events with the identified.
Efthymios N. Deliargyris: A number of cases that were included in the original analysis simply on the basis of transfusions, but without any evidence of clinical bleeding.
Efthymios N. Deliargyris: The results of the sensitivity analysis are shown at the bottom of the table, where now the composite endpoint that includes the moderate or severe bleeding event has a wind ratio of 1.65, which is also significant, with a p-value of 0.026. You will note that the composite that only includes severe events was not impacted by the sensitivity analysis since all severe events were deemed to be clinically meaningful events relating to significant bleeding.
Efthymios N. Deliargyris: The results of the sensitivity analysis is shown at the bottom of the table. We know the composite endpoint that includes the moderate or severe bleeding events has the win ratio of 165, which is also significant with a P value of 0.0 to six.
Efthymios N. Deliargyris: You will note that the composite of all includes severe events was not impacted by the sensitivity analysis, all severe events would deem to be Cleveland meaningful events relating to significant bleeding.
Efthymios N. Deliargyris: Finally, the exploratory major bleeding analysis looked at the total of major events that these subjects suffered, either according to the UTPB definition or according to chest tube drainage by accounting for patients that ended up with more than one liter of blood in the chest tubes that are placed in the chest after surgery. We saw that there were three major UTPB events in the drug zorb arm, while there were nine in the control arm.
Efthymios N. Deliargyris: Finally, the exploratory major bleeding analysis looked at the total of major events that these subjects suffered either according to the <unk> definition or according to chest drainage by accounting for patients.
Efthymios N. Deliargyris: Ended up more than one liter of blood in the chest is that a place mid chest after surgery.
Efthymios N. Deliargyris: What we saw that there were three major <unk> events and the drugs are bar, while there were nine in the control arm.
Efthymios N. Deliargyris: And when it comes to major chest tube drainage bleeds over a liter, there were none of those noted in the drug zorb arm, but there were four additional in the control arm for a total of three events with drug zorb and 13 in the control arm. That translated to rates of 6% versus 22% between the two arms, which was significant with a P value of 0.028.
Efthymios N. Deliargyris: And when it comes to major chest drainage bleeds over a leader there were none of those noted in the drugs are Bob there were four additional in the control arm for a total of three events drug, Georgia and 13 in the control arm.
Efthymios N. Deliargyris: Translated to rates of 6% versus 22% between the two arms, which was significant with the P value of 0.0 to eight.
Efthymios N. Deliargyris: The number needed to treat to prevent the major bleed in the trial, according to this exploratory analysis, was six. Otherwise said, for every six patients treated, there was one major bleeding event averted. Next slide, please.
Efthymios N. Deliargyris: The number needed to treat.
Efthymios N. Deliargyris: To prevent the major bleed in the trial. According to this exploratory analysis was six otherwise said for every six patients treated.
Efthymios N. Deliargyris: Major bleeding events suburban.
Efthymios N. Deliargyris: Next slide please.
Efthymios N. Deliargyris: With STAR-T data available, we have worked closely with both internal and external regulatory experts to formulate a regulatory strategy leading up to submission. Included on the top of the slide is a direct quote from one of our senior regulatory experts, Mr. Mark Duvall, J.D., President and CEO of Duvall & Associates. Good stay.
Efthymios N. Deliargyris: We started data available we have worked closely with both internal and external regulatory experts to formulate a regulatory strategy leading up to submissions.
Efthymios N. Deliargyris: Included on the top of this slide is a direct quote from one of our senior regulatory experts.
Efthymios N. Deliargyris: Mark Dwelle J D.
Efthymios N. Deliargyris: CEO of the volatile associates to states.
Efthymios N. Deliargyris: We have been working with Cytosorbents on the development of the regulatory strategy for the drugs in the ATR device, based on the data the company has shared with us and the extensive experience we have in preparation of the NOVA submission. In our opinion, this device is appropriate for the de novo patent. More specifically, the de novo pathway is for low to moderate risk devices for which special controls, for example, the availability of clinical data, provide reasonable assurance of safety and effectiveness, but there is no other approved predicate device.
Efthymios N. Deliargyris: We have been working with Cytosorb wings for the developing of the regulatory strategy for the drug of ATI device.
Efthymios N. Deliargyris: Based on the data of the company and have shared with us and the extensive experience we have in preparation of de Novo submissions. It is our opinion. This device is appropriate for the de Novo pathway.
Efthymios N. Deliargyris: More specifically the de Novo pathway is for low to moderate risk devices.
Efthymios N. Deliargyris: For which special controls for example, the availability of clinical data provide reasonable assurance of safety and effectiveness, but there is no other approved predicate device.
Efthymios N. Deliargyris: The de novo pathway puts heavy emphasis on the probable benefit and risk of the device in the intended population. Importantly, based on the priority review received by breakthrough devices, a recent analysis reported a 25% faster de novo application review time. Accordingly, we will be proceeding with parallel FDA de novo and health cannabis admissions in the third quarter of this year. And finally, FDA review times for the NOVA applications are stated as 150 days. However, in the post-COVID era, test reviews are averaging approximately one year. Next slide, please.
Efthymios N. Deliargyris: The de Novo pathway put heavy emphasis on the probable benefit and risk of the device and maintenance population.
Efthymios N. Deliargyris: Importantly, based on the priority review received by breakthrough devices. A recent analysis reported a 25% faster than Novo application review times.
Efthymios N. Deliargyris: Accordingly, we will be proceeding with parallel FDA de Novo and health, Canada submissions.
Efthymios N. Deliargyris: The third quarter of this year.
Efthymios N. Deliargyris: And finally FDA review times for de Novo applications are stated as 150 days.
Efthymios N. Deliargyris: However, in the post Covid era Thats reviews are averaging approximately one year.
Efthymios N. Deliargyris: Next slide please.
Efthymios N. Deliargyris: So, to summarize, Pythagoras is an FDA-approved drug that is widely used as standard of care in the U.S. and Canada but does confer an increased risk of severe perioperative bleeding for patients who require urgent surgical treatment. Drug Group ATR is an investigational device that has FDA breakthrough status for this application, highlighting the large unmet medical need and the lack of available alternatives. We believe that STAR-T data will inform the regulatory pathway by providing the necessary safety information.
Efthymios N. Deliargyris: So to summarize.
Efthymios N. Deliargyris: <unk> is an FDA approved drug was widely used a standard of care in the U S and Canada, but does confer an increased risk of severe perioperative bleeding for patients will require urgent surgical treatments.
Efthymios N. Deliargyris: Drug of ATR is an investigational device that is FDA breakthrough status for this application highlighting the large unmet medical need and the lack of available alternatives.
Efthymios N. Deliargyris: We believe that the start day data inform the regulatory pathway regulatory pathway by providing the necessary safety information.
Efthymios N. Deliargyris: Information on the proposed target intended population, which in our case will be CABG surgery, and information on the proposed indication for use, which would be for the reduction of bleeding severity. Based on the benefit-to-risk profile observed in STAR-T, regulatory experts recommend FDA submission for drug-related use in CABG surgery under the de novo pathway. And finally, pending FDA agreement on the de novo pathway. Breakthrough designation status is expected to facilitate a priority review with a potential FDA decision between 6 to 12 months following a Q3 submission. In parallel, we'll also be submitting to health care. And that concludes my prepared statements, and now I would like to turn it over back to Phil for his concluding remarks.
Efthymios N. Deliargyris: Information on the proposed target intended population, which in our case will be cut cabot's surgery.
Phil: And information of the proposed indication for use which would be for the reduction of legal severity.
Efthymios N. Deliargyris: Based on the benefit to risk profile observed will start Pete.
Efthymios N. Deliargyris: Regulatory experts recommend FDA submission for <unk> use in Cabot surgery under the de Novo pathway.
Phil: And then finally pending FDA agreement of the de Novo pathway breaks.
Efthymios N. Deliargyris: Breakthrough designation status is expected to facilitate the priority review with a potential FDA decision between six to 12 months falling in Q3 submission.
Efthymios N. Deliargyris: In parallel we'll be also submitting to health care.
Efthymios N. Deliargyris: That concludes my prepared statement and now I'd like to turn it over back to Phil for concluding remarks.
Phil: Thank you Mike.
Phillip P. Chan: We see tremendous opportunity fueled by important demographic trends, such as the aging baby boomer generation who are prone to critical illness, the expanding global use of blood thinners by millions of people all over the world for stroke and heart attack prophylaxis, and the chronic liver disease epidemic in 20% of the world population due to alcoholism, hepatitis, and fatty liver. We are at the forefront of helping to fill the substantial treatment gaps that exist across a spectrum of critical conditions, such as sepsis, shock, liver failure, acute respiratory distress syndrome, and infective endocarditis.
Phil: We see tremendous opportunity fueled by important demographic trends such as the aging baby Boomer generation core project critical illness, expanding global use of blood centers by millions of people all over the world for stroke and heart attack prophylaxis, and the chronic liver disease epidemic in 20% of the world population.
Phillip P. Chan: Alcoholism hepatitis.
Phillip P. Chan: Fatty liver.
Phillip P. Chan: We are at the forefront and helping to fill the substantial treatment gaps that exist across the spectrum of critical conditions, such as sepsis shark liver failure acute respiratory distress syndrome, infective endocarditis serious bleeding due to blood thinners and organ transplant.
Phillip P. Chan: Serious bleeding due to blood thinners An organ transplant Because of our ability to help control deadly inflammation and remove dangerous toxins and drugs that are often at the heart of life-threatening conditions. And in the future, with products in advanced development like Hemodefend BGA for universal plasma, our contribution could be even greater. We are excited by our near-term progress with sales, product gross margins, potential catalysts like Purify, our strategic partnerships like Fresenius, our goal to obtain debt financing, new clinical data, and importantly, the greatly increased visibility that we all now have on drugs or ATR.
Phillip P. Chan: Because of our ability to help control deadly inflammation and removed dangerous toxins and drugs that are often at the heart of life threatening conditions.
Phillip P. Chan: And in the future with products in advanced development like hemo defend PGA for universal plasma or contribution could be even greater.
Phillip P. Chan: We are excited by our near term progress with sales.
Phillip P. Chan: Gross margins potential catalysts like purify our strategic partnerships like Fresenius, our goal to obtain debt financing new clinical data and importantly, the greatly increased visibility we all now have on drugs our ETR.
Phillip P. Chan: By continually pushing boundaries and driving innovation, we are committed to expanding the dimension of blood purification, setting the stage for lasting transformation within the industry. And with that, this concludes our prepared remarks, so Operator, please open the call for the Q&A.
Phillip P. Chan: By continually pushing boundaries and driving innovation, we are committed to expanding the dimension of blood purification.
Phillip P. Chan: Setting the stage for a lasting transformation within the industry.
Phillip P. Chan: And with that.
Phillip P. Chan: This concludes our prepared remarks, so operator, please open the call up for the Q&A session.
Speaker Change: Thank you as a reminder, if you do have a question. Please press star one on your.
Operator: Thank you. As a reminder, if you do have a question, please press star 1 on your touch-tone phone. Please make sure your mute button is turned off to allow your signal to reach our Qt team. Questions have just come in from the line of Yuan Zhi with B-Rally Securities; please go ahead.
Yuan Zhi: Touchtone phone. Please make sure you have my Melbourne Stern after I know Youre seeing note that each Iraqi.
UMC: Question is now gone in from the line of UMC with B Riley Securities. Please go ahead.
Yuan Zhi: Thank you for hosting the KOL call. I have a couple of questions. I'm curious about the decision to pursue this de novo application versus pre-market approval. What has changed since the last discussion?
Yuan Zhi: Thank you for hosting the call.
Yuan Zhi: I have a couple of questions here.
Yuan Zhi: I'm curious about the decision to pursue this.
Yuan Zhi: Avid locations workers.
Yuan Zhi: <unk> approval.
Yuan Zhi: What has changed here the last.
Yuan Zhi: <unk>.
Phillip P. Chan: Yes, thanks, Juan. Maybe I should turn that over to Micah to discuss.
Yuan Zhi: Yes, Thanks Duane.
Micah: Maybe let me turn that over Q, Michael <unk> to discuss my guess.
Efthymios N. Deliargyris: Yes, thank you for the question. The simple answer is the availability of the STAR-T data, which we believe are very informative when deciding what the appropriate regulatory pathway is. As reviewed on the slides that we just looked at, The Noble Pathway is specifically designed for devices of low to moderate risk, which, you know, again, the STAR-T data provides a lot of visibility around that component as well, in addition, obviously, to the efficacy results. So that was the main determinant, in addition to, of course, input from both our internal regulatory resources and, of course, external regulatory.
Micah: Yes. Thank you for the question.
Efthymios N. Deliargyris: The simple answer is the availability of the <unk> T data.
Yuan Zhi: Got it. And then another follow up here is for the target.
Yuan Zhi: We believe a very informative when deciding what the appropriate regulatory pathway.
Yuan Zhi: As reviewed on the on the slides that we just.
Yuan Zhi: We'll look at.
Yuan Zhi: The novo pathway.
Yuan Zhi: Is.
Yuan Zhi: Specifically designed for devices, a low to moderate risk.
Yuan Zhi: Which again will start do data provides a lot of visibility.
Yuan Zhi: That component as well in addition, obviously to the efficacy results, but that was the main.
Yuan Zhi: Determined that in addition to of course.
Yuan Zhi: Input from both our internal regulatory resources and of course external regulatory experts.
Yuan Zhi: Okay.
Speaker Change: Got it and then another follow up here is for US a targeted formation three in Q I'm curious have you guys talked to FDA for this pre strip imation.
Speaker Change: And what's your confidence to have this information on time as you are preparing the data package and does that mean.
Yuan Zhi: Meeting minutes after the FDA meeting.
Efthymios N. Deliargyris: So, we are, as you know, the trial completed last year, in 2023, so we have used the last few months, obviously, to do a lot of the necessary work required to close, clean, and analyze the data. That culminated in the presentation, obviously, at double ATS. So there's been a lot of work along the way to get ready for these submissions, and we're now entering the final phase, which is preparing the documents, now that the regulatory pathway is more clear, to have the exact necessary materials for the submission.
Yuan Zhi: So we are as you know the trial.
Efthymios N. Deliargyris: <unk>.
Efthymios N. Deliargyris: Last year in 2023, so we have used the last few months, obviously doing a lot of unnecessary.
Efthymios N. Deliargyris: Requiring on closing cleaning and analyzing the data that.
Efthymios N. Deliargyris: That culminated in the presentation, obviously a double.
Efthymios N. Deliargyris: So theres been a lot of work along.
Efthymios N. Deliargyris: Along the way.
Efthymios N. Deliargyris: Two two.
Efthymios N. Deliargyris: To get ready for these submissions and we are.
Efthymios N. Deliargyris: Now entering the final phase, which is preparing the documents rather the regulatory pathway is more clear to have the exact necessary materials for the submission.
Efthymios N. Deliargyris: Our FDA interactions have always been, starting with the breakthrough designation applications, very collaborative and very productive. So we anticipate and hope that they continue that way, now that we also have the Starkey data available that will be the centerpiece of this administration.
Efthymios N. Deliargyris: Our FDA interactions have always been starting with a breakthrough designation application as we have always been very collaborative and very productive. So we anticipate and hope that they continue that way now, but we have also started data available that will be the central centerpiece of the submission.
Efthymios N. Deliargyris: Okay.
Yuan Zhi: Maybe another clarification question here is, before you submit this de novo application, is FDA requiring a pre-submission meeting to make sure everything is in line with their expectations? Thank you.
Efthymios N. Deliargyris: Maybe another clarification questions here is before you have made to this de novo application.
Yuan Zhi: FDA, requiring a pre submission meeting to make sure everything is in line with their expectation. Thank you.
Efthymios N. Deliargyris: It is our understanding, based on discussions with our regulatory experts, that the pre-submission meeting is not required by the Act.
Yuan Zhi: It is our understanding based on discussions with our regulatory experts.
Efthymios N. Deliargyris: I appreciate Mister meeting is not required by the FDA.
Yuan Zhi: Got it. That's all we have.
Speaker Change: Got it.
Speaker Change: I'll hop back on the chip.
Operator: I will hop back on.
Yuan Zhi: Your next question now comes in from the line of Sean Lee with <unk>.
Wainwright: Wainwright. Please go ahead.
Sean Lee: Your next question now comes in from the line of Sean Lee with H.E. Wainwright, please go ahead.
Speaker Change: Hey, good afternoon, guys and thanks for taking my questions.
Sean Lee: I just have two of them are first is on the go.
Phillip P. Chan: Hey, good afternoon, guys. And thanks for taking my questions. I just have two. First, on the good product sales we saw this quarter. So could you highlight what exactly was the push and pull that helped you achieve $9 million?
Sean Lee: Product sales, we saw this quarter. So could you highlight what exactly was the.
Phillip P. Chan: Pushes and pulls that helps you achieved a $9 million.
Christian Steiner: Yeah, Christian. Would you like to answer that?
Phillip P. Chan: Yes, Christian would you like to answer that.
Christian Steiner: Yes, sure. Thank you for the question. And good evening from Berlin, Germany.
Christian Steiner: Yes sure.
Christian Steiner: Yes. Thank you for the question.
Speaker Change: Even incumbent in.
Christian Steiner: Germany.
Christian Steiner: Yes, we had a very positive development and this was all done.
Christian Steiner: Yes, we had a very positive development in the trust counter and sales, and As discussed at the last earnings meeting, there is a very positive development, especially in direct sales in Europe. And in many of the distributed countries, we still see the market. [inaudible] Transcripts provided by Transcription Outsourcing, LLC, so that we can develop from here. But the major push, as I said, comes from direct sales in Europe and other countries.
Christian Steiner: As discussed at the last earnings meeting.
Christian Steiner: There are some very positive development, especially in the direct sales in Europe.
Christian Steiner: And many of the distributor countries, we still see the markets.
Christian Steiner: Challenges in the central European countries, like Germany, Austria, Switzerland.
Christian Steiner: Stabilized and we think the market stabilizes.
Christian Steiner: We can develop from here, but the major push as I've said come from.
Christian Steiner: From the direct sales.
Christian Steiner: In Europe and.
Christian Steiner: To put the countries.
Sean Lee: Thanks for that. Yes, I do expect this, and just as a quick follow-up, I do expect this growth to continue for the rest of the year.
Speaker Change: Thanks for that sufficient.
Speaker Change: Yes, I do expect this to them.
Speaker Change: Follow up and do you expect.
Speaker Change: This growth to continue for the rest of the year.
Sean Lee: Okay.
Christian Steiner: So, I think that the stabilization and the big market in Central Europe will continue. Of course, the underlying market situation, the post-pandemic situation, is not clearing overnight, but there are a lot of very strong initiatives from our side where we address new customer groups and expand to different indications, so I think that we can create growth out of this, and the growth we have seen in the direct sales countries in Europe and also in distributed countries, I very much expect to continue to develop nicely.
Sean Lee: So.
Speaker Change: I think that the.
Christian Steiner: Some of these lesions in the big markets in Central Europe will continue.
Sean Lee: I see. Thank you for that.
Christian Steiner: Of course the underlying.
Sean Lee: Market situation the post pandemic.
Sean Lee: Duration is not clearing overnight, but there's a lot of.
Sean Lee: Very strong initiatives from all sides.
Sean Lee: We address new customer groups.
Sean Lee: And two different indications so on things that we can.
Sean Lee: Create growth on the list.
Sean Lee: And the growth we have seen in the <unk>.
Sean Lee: Alright since countries in Europe, and also distributor countries vary.
Speaker Change: Do you expect.
Sean Lee: We continue to develop the monkey.
Sean Lee: My last question is on the Purify system. So, with the launch imminent, I was wondering how the commercial structure for that is set up? And what sort of impact can we expect this year or in the next? Civil Quarters.
Sean Lee: I see thank you for that.
Speaker Change: My last question is on the purify system. So with the launch imminent I was just wondering what how is the commercial structure for that setup and what sort of impact can we expect.
Speaker Change: In this year or in the next several quarters.
Phillip P. Chan: I think that the Purify Pump is really a means to an end, right, as I mentioned in my comment, is meant to help to build an infrastructure of blood purification in distributor territories where they don't have an existing strong infrastructure of dialysis or dialysis technicians, for that matter. This is a pump that we're actually using for the veterinary market in the United States, and we've gotten lots of feedback that it's a very easy-to-use pump that requires very little in the way of maintenance.
Speaker Change: I think the.
Speaker Change: Sure Hi pump is really a means to an end as I mentioned in my comments.
Phillip P. Chan: To help to build an infrastructure of blood purification.
Phillip P. Chan: Distributor territories, where they don't have an existing strong infrastructure in dialysis or dialysis technicians for that matter.
Phillip P. Chan: This is a pump that we're actually using for the vet market in the United States annually.
Phillip P. Chan: Lots of feedback that it's very easy to use pump.
Phillip P. Chan: That requires very little in the way of maintenance.
Phillip P. Chan: So we're very excited about this because what it's intended to do is to drive more sales of Cytosorb, obviously in places that have plenty of critically ill patients but do not have that infrastructure. The other thing that it's intended to do, as I mentioned, is to really drive earlier usage and more frequent usage of our technologies because what we have found is that when you treat people early and you try to catch this deadly inflammation more rapidly before it has time to cause destruction to vital organs, outcomes are typically much more reliable and much better.
Phillip P. Chan: So we're very excited about this because what it's intended to do is to drive more sales of Cytosorb, obviously in places that.
Phillip P. Chan: Have plenty of critically ill patients but.
Phillip P. Chan: It does not have that infrastructure.
Phillip P. Chan: The other thing that it's intended to do as I mentioned is to really drive earlier usage of more frequent usage of our technologies because what we've found is that when you treat people early and you try to catch this deadly inflammation more rapidly before it has time to pause destruction to vital organs.
Phillip P. Chan: Outcomes are typically much more reliable and much better and so again, we think that.
Phillip P. Chan: And so again, we think that having this purified pump out there will be able to really be a major key driver of growth, hopefully going forward. We haven't made our expectations public on what we expect that pump to do. But again, the goal here is an enabling technology to sell more cytosorb devices. It's very similar to the printer cartridge model.
Phillip P. Chan: Having to purify pumped out there well be able to really is actually a major key driver of.
Phillip P. Chan: <unk>.
Phillip P. Chan: Growth hopefully going forward.
Phillip P. Chan: We haven't made our expectations.
Phillip P. Chan: Public on what we expect that pump to be to do so.
Phillip P. Chan: But again the goal here is an enabling technology.
Phillip P. Chan: Sell more cytosorb devices, it's very similar to the printer printer cartridge model.
Sean Lee: Thank you. That's all the questions I have.
Speaker Change: Thank you that's all the questions I have.
Speaker Change: Thanks, Sean.
Thomas Kerr: Your last question comes in from the line of Tom Kerr with Sachs Investment Research. Please go ahead.
Sean Lee: Your last question now comes from the line of Tom Carroll with Zacks investment Research. Please go ahead.
Thomas Kerr: Hi Guys, a quick question on the JugSorb submissions. I understand they'll be submitted roughly the same time to FDA and Health Canada, but are the approvals independent or are they done in conjunction? Or put another way, is the Health Canada approval timeline also six months to a year?
Thomas Kerr: Hi, guys quick question on the drugstore submissions I understand there'll be submitted roughly the same time too.
Thomas Kerr: The FDA and health, Canada, but are the approvals independent or are they done in conjunction or put it another way.
Thomas Kerr: As the health, Canada approval timeline also six months to a year.
Phillip P. Chan: Oh, Vince, maybe you would like to try to answer that?
Speaker Change: Maybe you would like to try to answer that.
Vincent J. Capponi: Sure, so this is Vincent Capponi. So the approvals are independent. They're not dependent, the Canada, Health Canada, is not dependent upon the U.S. approval. We'll use the same data, but we will structure the submissions slightly differently as required by Health Canada than what the U.S. FDA requires. So they can be done in parallel and independently.
Phillip P. Chan: Sure.
Vince: So the this has been the.
Vincent J. Capponi: The approvals are independent Theyre not dependent the Canada health, Canada is not dependent upon the U S approval, we'll use the same data, but we will structure the submission is slightly different.
Vincent J. Capponi: As required by health, Canada than what USF.
Vincent J. Capponi: U S. FDA requires so they can be done in parallel and independently.
Vincent J. Capponi: So it's possible you could.
Thomas Kerr: So, it's possible you could... Start in Canada in six months and the U.S. in a year, and they were to be, different time frames in that regard? Yeah, that's correct.
Vincent J. Capponi: Start in Canada in six months.
Thomas Kerr: And a year and they were to be just different timeframes.
Speaker Change: Yeah, that's correct I mean, you know health, Canada has timelines as well.
Vincent J. Capponi: I mean, you know, Health Canada has timelines as well. They, they, you know, follow closely the U.S., but they are generally faster than the U.S., so it is possible that it could be introduced in the U.S. or it could be introduced, excuse me, into Canada sooner than the U.S. I think you have said in the past that the addressable market is about $325 million for both countries. Is that still a good number? Can you break that down between the U.S. and Canada?
Vincent J. Capponi: Hey.
Vincent J. Capponi: Follow closely to the U S, but they are generally faster.
Vincent J. Capponi: And then the U S. But it is possible that that could be introduced in the U S.
Vincent J. Capponi: There could be introduced excuse me into Canada sooner than the U S.
Vincent J. Capponi: Alright.
Vincent J. Capponi: One more on that topic I think you had said in the past the addressable market is about $325 million for both countries is that still a good number.
Vincent J. Capponi: Can you break that down between the us and Canada.
Vincent J. Capponi: Yeah.
Phillip P. Chan: Yeah, that is still a good number. I think that, as you heard from Micah, our focus will be on the isolated CABG population. Recall that isolated CABG is the most common cardiac surgery in the world, right? This is being driven by coronary artery disease and people having heart attacks, which is one of the leading diagnoses in hospitals amongst any And so the major use case is not to go in for one of these more severe surgeries, right? If you think you're, if a person thinks that they're having a heart attack, far fewer will actually be having a different diagnosis, like a ruptured valve or a dissecting aorta.
Vincent J. Capponi: Yes.
Vincent J. Capponi: That is still a good number I think that although as you heard from my guess that are our focus will be on the isolated cabbage population recall that isolated cabbage is the most common cardiac surgery in the world Alright. This is being driven by coronary artery disease and people, having heart attacks, which is one of the leading diagnostic.
Phillip P. Chan: And hospitals amongst any aldis.
Phillip P. Chan: And so the major use cases is not to go in for one of these.
Phillip P. Chan: More severe surgeries right. If you think if a person.
Phillip P. Chan: Person is thinking that they are having a heart attack.
Phillip P. Chan: Most of them are really having a heart attack and will need if they don't qualify for a stent they will need cabbage surgery.
Phillip P. Chan: <unk>.
Phillip P. Chan: Alright.
Phillip P. Chan: Far fewer will be actually having a different diagnosis.
Phillip P. Chan: A ruptured valve or a.
Phillip P. Chan: Dissecting aorta.
Phillip P. Chan: So the fact that we're going after the isolated cabbage market, and we have data that we believe supports a favorable benefit to risk assessment in that population, is a really positive thing for us, and positive for the overall market opportunity. Now, from the US to Canada split, it's roughly a one to... 10-to-1 split. The U.S. market is 10 times larger than the Canadian market. However, what is very fascinating about the Canadian market and what you may have heard Dr. Whitlock say on the call, on the KOL analyst call on Monday, is that in the guidelines. [inaudible] And he again reiterates how data-driven Canadian physicians are.
Phillip P. Chan: So.
Phillip P. Chan: The fact that we're going after the isolated cabbage market is and we have data to show that we believe supports a favorable benefit to risk.
Phillip P. Chan: Assessment in that population.
Phillip P. Chan: Is it a really positive thing for us and positive for the overall market opportunity.
Phillip P. Chan: Now from U S to Canada.
Phillip P. Chan: Split its roughly a one.
Phillip P. Chan: A 10 to one split.
Phillip P. Chan: The U S market is 10 times larger than the Canadian market. However, what is very fascinating about the Canadian market.
Phillip P. Chan: What you may have heard Dr. Whitlock sale on the.
Phillip P. Chan: Call.
Phillip P. Chan: On the Kols analysts call.
Phillip P. Chan: On Monday is that.
Phillip P. Chan: In the guidelines.
Phillip P. Chan: This and the <unk>.
Phillip P. Chan: Ken reiterate kao data driven the Canadian physicians are so in the official guidelines for blood Center.
Phillip P. Chan: So in the official guidelines for blood thinner treatment in people having a heart attack, it is recommended that they only be placed on Berlinta and not on the major competitor in the United States, which is Plavis. And we've also learned that Effient, the only other major competitor in the United States for Berlinta and for people having a heart attack, is actually not distributed anymore by its manufacturer in Canada. So pretty much everybody is on Berlinta in Canada.
Phillip P. Chan: Treatment and people, having a heart attack. It is recommended that the only be placed on brilinta and not on the major competitor in the United States, which is plavix.
Phillip P. Chan: And we've also understood that the only other major competitor.
Phillip P. Chan: The United States to Brilinta and people, having a heart attack is actually not distributed anymore.
Phillip P. Chan: By its manufacturer in Canada, so pretty much everybody is on Brilinta in Canada, and Canada has some very interesting dynamics.
Phillip P. Chan: And Canada has some very interesting dynamics. One of the major reasons why you put someone on dual antiplatelet therapy is because you're trying to temporize them and trying to prevent that heart attack from getting worse by thinning the blood and trying to prevent that clot from propagating and getting bigger. And in Canada, the dynamics are such that there are far fewer major cardiac centers in Canada. And you find that many people are in far-flung areas of Canada that require transportation for intervention for a heart attack, either PCI or CABG, to these major cardiac surgery centers and so are out there suffering from these cardiac symptoms for a long time while they're in transit.
Phillip P. Chan: One of the major reasons why you put someone on dual anti platelet therapy is because youre trying to Temporize, then trying to prevent that heart attack from getting worse by sending the blood and trying to prevent that platform from propagating is getting bigger.
Phillip P. Chan: <unk>.
Phillip P. Chan: In Canada. The dynamics are such that there are far fewer.
Phillip P. Chan: Major cardiac.
Phillip P. Chan: Centers in Canada.
Phillip P. Chan: And you find that many people are in far flung areas of Canada that require transportation.
Phillip P. Chan: Intervention for heart attack, either PCI or cabbage to these major cardiac surgery centers and so are out there.
Phillip P. Chan: Suffering from these cardiac symptoms for a long time Walter in transit.
Phillip P. Chan: And this is one of the reasons why the use of dual antiplatelet therapy in these heart attack patients is so high because they need to be protected as they get transported to these major cardiac surgery centers. So, Canada is, we believe, will actually be a very strong market for us.
Phillip P. Chan: And this is one of the reasons why.
Phillip P. Chan: The use of dual anti platelet therapy in these heart attack patients is so high.
Phillip P. Chan: Because they need to be protected as they get transported to these major cardiac surgery centers. So cardiac so Canada is <unk>.
Phillip P. Chan: We believe we will be actually very.
Phillip P. Chan: Strong market for us and maybe with that maybe.
Efthymios N. Deliargyris: And maybe with that, maybe, Micah, if you had any other color that you wanted to give.
Efthymios N. Deliargyris: Maybe.
Micah: Mike is if you had any other color that you wanted to get.
Micah: That might be helpful.
Efthymios N. Deliargyris: I completely agree with the remarks that you made already. Canada has a very uniform treatment paradigm that they actually have implemented on a national level, where they try to adopt the best therapies. They quickly come up with national guidelines, and they implement them. And Chicago is a great example.
Micah: Thanks Bill.
Speaker Change: Completely agree with what they were.
Efthymios N. Deliargyris: Remarks that you've made already Canada has a.
Efthymios N. Deliargyris: A very uniform treatment paradigm.
Efthymios N. Deliargyris: They actually have implemented.
Efthymios N. Deliargyris: National level.
Efthymios N. Deliargyris: Where they tried to adapt best therapies quickly come up with that National guidelines and AEP monthly cargo is a great example, and again I urge everyone to listen to our Webinars and to hear directly from Dr would look but.
Efthymios N. Deliargyris: And again, I urge everyone to listen to our webinar and to hear directly from Dr. Whitlock, but there's a very, very systematic approach to care in Canada, and what we're hearing is that one of the major issues is a bottleneck that is created in some of these large volume institutions. So, you know, they're very enthusiastic about a solution that can potentially alleviate that congestion that patients are just sitting there waiting, causing in their, you know, care pathways.
Efthymios N. Deliargyris: Well, there's a very very systematic approach to care in Canada and <unk>.
Efthymios N. Deliargyris: What we're hearing is that one of the major issues is a bottleneck that has created in some of these large volume institutions. So they are very enthusiastic about our solution that.
Efthymios N. Deliargyris: And potentially alleviate.
Efthymios N. Deliargyris: Congestion that patients are just sitting there waiting.
Efthymios N. Deliargyris: Causing.
Efthymios N. Deliargyris: In their care pathways.
Efthymios N. Deliargyris: Now in regards to the total addressable market and the number that you quoted, I mean if you want we can take a discount similar to what we saw, in the breakdown of surgeries in STAR-T, where, you know, 92% of patients were isolated CABG, which obviously will be the target intended population in our submissions. But on the other hand, you may want to counter that with the fact that this is the year that exclusivity ends for Ticagrelor, which would mean, you know, an ongoing reduction in price, which has been one of the reasons why Ticagrelor, I'm sorry, why Clopidogrel or Plavix, an older generation, not as effective medication is still in use in some places, due to a much more favorable price with Clopidogrel being generic now for a long time.
Efthymios N. Deliargyris: Now with regards to the total addressable market and the number that you quoted.
Efthymios N. Deliargyris: I mean, if you want you can take the disco similar that we saw.
Efthymios N. Deliargyris: In.
Efthymios N. Deliargyris: The breakdown of surgeries, we started T.
Efthymios N. Deliargyris: At 92% of patients.
Efthymios N. Deliargyris: Isolated cabinets, which obviously will be the target intended population.
Efthymios N. Deliargyris: Submissions, but on the other hand, we may want to color that with the fact that this is the year that exclusivity and towards like Azure, which room.
Efthymios N. Deliargyris: An ongoing reduction in price, which has been one of the reasons why <unk> I'm, sorry, while clopidogrel plavix and older generation not as effective medications stealing use in some places due to a much more favorable price with political being generic now for a long time. So so we think it's going to be.
Efthymios N. Deliargyris: So we think it's gonna be fluid, but probably the upside will be greater due to the greater adoption that is happening anyway and the availability of generic Ticagrelor going forward after 2024. It's probably a solid number for you to anchor yourself on, right?
Efthymios N. Deliargyris: Fluid, but probably be upside.
Efthymios N. Deliargyris: Will it be greater due to the greater adoption that was happening anyway, and the availability of generic archive.
Efthymios N. Deliargyris: Going forward after 2024.
Efthymios N. Deliargyris: Probably a solid number for you to anchor yourself on right now.
Speaker Change: Great. Thanks for the extra color on the one more quick financial question for me then I'll jump back in the queue.
Thomas Kerr: Great, thanks for the extra color on that. One more quick financial question from me, and then I'll jump back in the queue. How do we think about grant income for the rest of the year? Is that sort of grant income, sort of the steady state you receive this quarter? Or do we get back up to a million for the rest of the year, or per quarter for the rest of the year?
Thomas Kerr: How do we think about grant income the rest of the year is that sort of the grant income sort of a steady state you received this quarter or where do we get back up a million the rest of the year.
Thomas Kerr: For the rest of the year.
Kathleen P. Bloch: Kathy, would you like to answer that?
Thomas Kerr: Kathy would you like to answer that.
Kathleen P. Bloch: Yeah, I'd be happy to. So I think we can expect to see similar quarterly results for the rest of the year as we saw in the first quarter. However, I will point out that we are applying for new grants, and the reason that the grant income is lower is just because we completed three grants last year. So the backlog is still strong at five million dollars, and we are expecting to build on that backlog. So we'll see, with more success in gaining some new grants, we would see that number likely come up again.
Kathy: Yes, I'd be happy too so I.
Kathleen P. Bloch: I think we can expect to see similar quarterly results for the rest of the year as to what we saw in the first quarter. However, I will point out that we are applying for a new grant.
Kathleen P. Bloch: And the reason that they grant income is lower just because we completed three grants last year. So the backlog is still strong at $5 million and.
Kathleen P. Bloch: And we are expecting to to build to that backlog. So we will see with more with success on gaining some new grants, we would see that number likely come up again.
Speaker Change: Great. That's all the questions I have for now thank you.
Speaker Change: This time I would like to turn the call back to management for any additional or closing remarks.
Speaker Change: Thank you and thank you everyone for joining the call today. If you do have any other questions. Please feel free to reach out to Kathy Kathy.
Speaker Change: Kathy a key block K L O CHF quite Assortments dot com and we will reply to your questions where possible. We look forward to our next quarterly call. Thank you everyone very much.
Kathleen P. Bloch: Okay.
Speaker Change: That concludes our conference for today I'd like to thank everyone for participation.
Thomas Kerr: Great, that's all the questions I have for now. Thank you.
Operator: Thank you. That concludes our conference for today. I'd like to thank everyone for their participation. Please wait. The next conference will begin shortly.
Speaker Change: Please wait the conference will begin shortly.
Phillip P. Chan: At this time, I would like to turn the call back to management for any additional or closing remarks.
Operator: Well, thank you. And thank you, everyone, for joining the call today. If you do have any other questions, please feel free to reach out to Kathy at Kathy at KBLOCH, K-B-L-O-C-H, at Cytosorbents.com, and we will reply to your questions where possible. We look forward to our next quarterly call. Thank you, everyone, very much. Good night.
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